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Journal of Political Sciences & DOI: 10.4172/2332-0761.1000252

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Research Article Open Access

The Relationship between Alcohol Availability and Alcohol Consumption

Pulliainen M* and Valtonen H
Department of Health and Social Management, University of Eastern Finland, Kuopio Campus, P.O. Box 1627, 70211 Kuopio, Finland

Abstract
This paper examines the relationship between retail alcohol supply and total alcohol consumption. In Finland, the
state alcohol company (Alko) has a retail monopoly on the sale of stronger alcoholic beverages. Only drinks with a
maximum of 4.7% alcohol by volume can be sold in licensed grocery stores. The influence of the state alcohol monopoly
was examined using data from Alko outlets and controlled sales from restaurants and grocery stores, prices, regional
differences in consumption levels, and the trend over time. Data were collected from Alko registers and the National
Institute of Health and Welfare. Panel data from regions of Finland over the period 1995-2009 were analysed using
regression models.
This study provides evidence that alcohol supply has an impact on alcohol consumption. The consumption of strong
alcohol and wine increases as the number of Alko outlets grows. Taxation through pricing also affects the purchase of
strong alcohol. The disposable income of the consumer does not influence consumption, and there is no relationship
between the number of Alko outlets and alcohol consumption in restaurants and alcohol purchases from grocery stores.

Keywords: Alcohol availability; Monopoly; Alcohol consumption;
Retail alcohol outlets
Introduction
In this study, we contribute to the discussion on the role of state
control of alcohol consumption. Is there still a place for the monopoly,
how well does taxation through alcohol prices work, and is there a
relationship between drinking products from Alko stores (which holds
the monopoly on strong alcohol sales) and grocery stores and drinking
in restaurants? The tight control of alcohol availability through the state
monopoly and the control over prices gives us a unique opportunity
to study the effects of changes in alcohol availability on alcohol
consumption. We assume that Finland has its own cultural climate
regarding alcohol, which is largely based on a long tradition of alcohol
use and a strict alcohol monopoly.
The availability of alcohol has been restricted in Finland since 1932,
when the first outlets of Alko, the state alcohol company, were opened
after a period of prohibition (1919-1932). Prior to 1995, only Alko
had the licence to produce, import, and export alcohol. Wholesale
and retail sales of alcoholic beverages were also strictly controlled by
Alko. Today, Alko has a retail monopoly on selling alcoholic beverages
that contain more than 4.7% alcohol by volume. Beer, cider, and other
drinks with a maximum of 4.7% alcohol by volume can be sold in
licensed grocery stores [1,2].
In Finland, the total consumption of alcohol consists of legal domestic
sales, tourist imports, and moonshine (in Finnish ‘kotipoltto’, ‘home
brew’ production). Undocumented consumption is defined as alcoholic
imports by passengers, home preparation and illegal distillation
at home, smuggling, surrogates, and alcohol consumed by Finns
abroad. There are some estimates available for the magnitude of this
consumption. In the late 1980s and early 1990s, Finland experienced
a boom in wine-making at home, with many small speciality stores
selling wine-making equipment. The main reason for this boom was
the economic recession in Finland at the beginning of the 1990s, giving
people a stronger motivation to produce cheap alcohol. Undocumented
consumption for 1995-2010 was estimated to be quite stable at between
2.0 and 2.7 per cent of the total consumption of alcohol in Finland.
Most of this consumption was tourist alcohol imported from abroad
(about 75% of the undocumented consumption) [3,4].
A large body of literature shows drinking to be a risk factor for many
injuries, diseases, and social problems. Alcohol causes severe health
and non-health-related problems, such as additional deaths, assaults,
drink-driving offences, and losses in productivity due to an increased
amount of sick leave. Alcohol-related causes are the third most common
cause of death in the US and the most common cause in Finland [5-
8]. Alcohol consumption is high in Finland and Denmark based on
alcohol consumption statistics from countries that do not include free
private import of alcohol from other countries in their calculations.
Between 1990 and 2013, Finland and Denmark had a higher alcohol-
related disease burden than the other Nordic countries [9,10].
Economically, it is assumed that consumers behave rationally and
they acquire commodities to maximize their utility based on their
own preferences. Alcohol is a totally different commodity, and often
alcohol consumption is related to addiction, which has an impact on
consumers’ behaviour. A strong commitment to alcohol is the basis
for a diagnosis of alcohol dependence, at worst the form of mental
illness known as alcoholism. However, the economics literature states
that people tend to drink less alcohol and have fewer alcohol-related
problems when alcohol prices are increased or alcohol availability
is restricted. Secondly, policy changes have often had their greatest
effect on heavier drinkers [11,12]. Unfortunately some studies have
also indicated that very heavy drinkers consume alcohol regardless
of its price level [13]. Because alcohol is its own kind of commodity,
alcohol policy can be seen as a necessity. The aim of alcohol policies
is to mitigate the negative health and social consequences of alcohol
use. There are common strategies used in alcohol policies: the price
policy, taxation, and restrictions on the availability of alcohol. The
*Corresponding author: Pulliainen M, Department of Health and Social
Management, University of Eastern Finland, Kuopio Campus, Kuopio, Finland, Tel:
+358405055584; E-mail: pulliain@uef.fi
Received April 11, 2017; Accepted May 15, 2017; Published May 18, 2017
Citation: Pulliainen M, Valtonen H (2017) The Relationship between Alcohol
Availability and Alcohol Consumption. J Pol Sci Pub Aff 5: 252. doi: 10.4172/2332-
0761.1000252
Copyright: © 2017 Pulliainen M. This is an open-access article distributed under
the terms of the Creative Commons Attribution License, which permits unrestricted
use, distribution, and reproduction in any medium, provided the original author and
source are credited.

J Pol Sci Pub Aff, an open access journal Volume 5 • Issue 2 • 1000252
ISSN: 2332-0761
Citation: Pulliainen M, Valtonen H (2017) The Relationship between Alcohol Availability and Alcohol Consumption. J Pol Sci Pub Aff 5: 252. doi:
10.4172/2332-0761.1000252
main objective of alcohol supply studies is to provide policy-relevant
information [14].
In Finland, the alcohol policy was deregulated to some extent by the
Alcohol Act of 1994, which increased travellers’ duty-free allowances.
Alcohol restrictions on imports from other EU countries to Finland
were removed in early 2004. Alcohol imports were presumed to
increase when the neighbouring state of Estonia joined the EU in early
May 2004. In response, the Finnish government lowered the level of
taxation on alcohol. In 2004, both retail sales of alcohol and tourist
imports of alcohol from Estonia increased. The negative effects on
health became evident: for example, there was an increase in alcohol-
related deaths. The tax cut had a greater negative public health effect
than increasing travellers’ allowances [15,16]. To reduce the social and
health harm, alcohol taxes were raised again in 2008.
Policies
Alcohol availability: Alcohol policies can regulate the physical
availability of alcohol through the number of outlets and the outlet’s
business hours. In this paper, we study the impact of alcohol supply
on consumption in the Finnish context, where the supply and price
of alcohol are under monopoly control. The supply effect on alcohol
consumption is precisely defined using the same regional classification
for the whole 14-year period studied. Alcohol availability was measured
as the number of Alko outlets in the country’s regions.
Based on Popova, et al. [17] systematic review, alcohol outlet
density and hours and days of sale had an impact on overall alcohol
consumption, drinking patterns, and harm. Restricting the availability
of alcohol is an effective measure to prevent alcohol-related harm. In
Campbell, et al. [18] review, the basic result was that the density of
alcohol outlets in communities could be regulated to reduce alcohol
consumption and the harm it causes. Studies have been undertaken
in Finland, Iceland, New Zealand, and North Carolina, USA. Each
study showed that the increase in the number of outlets significantly
increases alcohol consumption. Alcohol policies involving a licensing
system for alcohol retail sales and regulating the physical availability
of alcohol and business hours were the most consistent predictors of
alcohol consumptions also in low- and middle-income countries when
country-level living standards and drinking patterns were controlled
for [19].
The availability of alcohol, defined as the number and types of alcohol
outlets, has been examined in traffic injury studies. In California,
changes in outlet densities were positively related to traffic injury rates.
In the United States, from 1975 to 1986, night-time traffic fatality rates
were strongly related to beer sales, moderately influenced by spirits
sales, and almost unaffected by wine sales. A reduction in availability
may reduce alcohol sales and alcohol-related harm [20,21].
Previous research has demonstrated that in many cases, increased
alcohol availability also increases consumption, but uncertainty remains
concerning the magnitude of the effect on alcohol consumption. As
Gruenewald et al. summarize, there is a difficulty in obtaining sufficient
data to examine comprehensive models of access to alcohol. Nowadays,
theoretical approaches focus more on the social mechanism behind
the distribution of problems related to alcohol and regulations on
availability [22,23]. However, precise knowledge of how much alcohol
availability affects alcohol consumption is still missing. It is important
to learn this information, especially now that the world is changing
and old structures are being evaluated. The grounds for limiting the
availability of alcohol and the alcohol monopoly should therefore be
justified.
J Pol Sci Pub Aff, an open access journal
ISSN: 2332-0761
Page 2 of 6
Price policy: In Finland, alcohol prices are under monopoly control.
Several studies have shown that alcohol consumption is responsive
with respect to its price. Wagenaar’s meta-analysis established the
highly significant relationship between alcohol price or tax measures
and indices of sales or consumption of alcohol [24-26]. According to
Swedish price and sales data gathered by Systembolaget from 1984
to 1994, consumers respond to price increases by altering the total
consumption through varying brand choices. The results revealed
that consumer behaviour is related to changes in beverage prices.
Instead of simply lowering the quantity when alcohol price increases,
alcohol drinkers drink cheaper alcohol to maintain their overall level
of consumption. Wagenaar et al.’s systematic review suggests that
doubling the alcohol tax would reduce alcohol-related mortality by an
average 35%, traffic accidents deaths by 11%, and violence by 2% [27].
In the United States, the demand for beer and spirits seems to be more
sensitive to price changes in the licensed states than in the states where
regulated markets do not exist [26]. In Finland, the effects of alcohol
taxation and changes in alcohol consumption caused by changes
in traveller’s import allowances have been studied in subgroups of
the population. Alcohol taxation and prices affect consumption and
related harms, and heavy drinkers are responsive to price. The changes
in Finnish alcohol policy in 2004 increased severe alcohol-related harm
among the poorest sections of the population, such as the unemployed.
In addition, those better off also increased consumption [28-30].
Income-related alcohol consumption
Previous studies on the relationship between alcohol consumption
and income have shown contradictory results. Some studies have
shown that lower incomes increase drinking while others have shown
it has no effect or even the opposite. However, it can be assumed
that alcohol consumption probably differs between population
groups. Socioeconomic differences, such as income and the level of
educational, can influence alcohol drinking. There is no clear evidence
on how alcohol consumption affects people’s income levels. Some
studies suggest that people with high incomes drink more often but in
smaller amounts. On the other hand, unhealthy habits-such as alcohol
use-can also be typical of the lower social classes. Less well-educated
adults have been found to drink more at all ages, and less well-educated
adults drink more during a drinking session than their better-educated
peers [31,32].
Data
We used panel data for the period 1995-2009. The years 1999 and
2000 are excluded from the data because Alko made a comprehensive
data system change during that period and consequently there were
no fully comparable sales data available for Alko outlets. The data
came from Alko (Alko outlets, alcohol sales, and prices), the National
Institute of Health and Welfare (grocery stores and restaurants), and
the SOTKAnet Statistics and Indicator Bank (various municipal-level
statistics). Changes in the number of municipalities due to mergers
have been taken into account. The 2010 regional classification, which
is based on the classification of the Association of Finnish Local and
Regional Authorities (NUTS4 level in the European Union), is the
same as the 1995-2009 classification. The 2010 regional classification
for mainland Finland comprised 67 regions and 331 municipalities.
Loviisa and Pieksämäki municipalities have been excluded from the
data because these municipalities have made consolidations and
reliable data was not available; in addition, a few other municipalities
(Himanka,Ylämaa, Ruotsinpyhtää, Noormarkku, Liljendahl, Pernaja)
have been excluded because of defective data.
Volume 5 • Issue 2• 1000252
Citation: Pulliainen M, Valtonen H (2017) The Relationship between Alcohol Availability and Alcohol Consumption. J Pol Sci Pub Aff 5: 252. doi:
10.4172/2332-0761.1000252

Page 3 of 6

In this study, alcohol consumption has been sorted into three main estimation of cross-price elasticities impossible. In addition, the years
groups: strong alcohol (spirits, other strong alcohol, and fortified and prices correlate heavily. In our models, we have taken these factors
wines), wine (light wines), and brewery products (ciders, beers, and into account by using one real price variable, using robust option fixed
similar beverages). This classification (strong alcohol, wine, and brewery effects (FE) models and making models with the price variable having
products) is used by Alko. Brewery products also include grocery store time and time2 in the model, and without the price variable using time
sales. We studied alcohol consumption in restaurants separately by as a class variable in the model. The disposable income of households
using restaurant sales data. We measure all alcohol consumption by also correlates with time. We constructed one real price variable, which
sales. This is a common method in economics: commodities that are is the mean of the volume‑weighted retail sale price indexes for each
bought are also used. Alcohol consumption in all groups are defined year, i.e. the alcohol sale prices multiplied the retail sales in litres (100%
in terms of absolute alcohol (100%) and are divided by drinking age alcohol) for each year.
population (15-89 years). The legal drinking age in Finland is 18 years.
In this study, alcohol drinking is assumed to start at the age of 15. Based Dependent variables
Description Mean(SD)
(litres of 100% alcohol)
on our data for the period 1995-2009, the drinking age population
Includes retail sales from Alko, brewery
increased from 4.1 to 4.4 million people. Descriptions of variables are Total alcohol consumption products from grocery stores, and sales 8.9 (2.83)
shown in Table 1. from restaurants
Strong alcohol Includes spirits, other strong alcohol,
The explanatory variables in this study are: alcohol availability, consumption and fortified wines retail sales from Alko
2.8 (1.15)
disposable income, and alcohol price. Alcohol availability is measured
as the number of Alko outlets in the region. From 1995 to 2009, the Wine consumption Includes light wine retail sales from Alko .87 (.51)
number of outlets increased from 233 to 302. The number of outlets per
Brewery product Includes brewery product retail sales
region varied: for example, in the Helsinki region in 2009 there were 54 consumption** from Alko and sales from grocery stores
3.7 (.84)
Alko outlets, and in the Joensuu region there were 9 Alko outlets. There Alcohol consumption in Includes all alcohol sales from
1.4 (.85)
were no major differences in the hours of trading over the period 1995- restaurants restaurants
2009, so we excluded this information from the data. Explanatory variables
1000× number of retail Alko outlets per
The disposable income of households consists of gross income, i.e. Number of Alko outlets
drinking age population
.09 (.06)
wages, income from self-employment, property income, and current Includes gross income, wages, income
transfers received, as well as current transfers paid, minus taxes Disposable income (€)
from self-employment, property income, 12,927
(Statistics and Indicator Bank), and the figures are regional averages. and current transfers received and paid, (2,584)
minus taxes
We constructed one real alcohol price variable, which was the mean
Alcohol sales prices multiplied by the 15.46
of the sales volume multiplied retail sale price indexes for each year, Real price (€)
sale in litres of absolute alcohol (100%) (3.55)
i.e. the alcohol sales price multiplied by retail sales in litres for each
Notes: The variables are calculated for people aged 15-89 years old and are
year. The retail sale price indexes, which were obtained from Alko, are regional averages.
uniform for the whole country. Descriptions of variables are shown in **
The data for brewery products from grocery stores were available from 1998 to 2009.
Table 1. SD: Standard deviation.

Figure 1 shows the strong association between total alcohol Table 1: Variable descriptive statistics.
consumption and the number of Alko outlets for all regions. The total
consumption of alcohol (the average consumption per drinking‑age
person) increases with the number of Alko outlets (the figures are
regional averages). This supports our hypothesis that there is a link 9. 5
between alcohol availability and consumption. 5
Statistical Methods
Alcohol consumption in

9
We studied the consumption of total alcohol, strong alcohol, wine, 4.
Number of Alko

brewery products, and alcohol consumption in restaurants separately. 5

The panel data were analysed using regression models. We estimated 8.
the following models for all alcohol consumption types: 5
outlets
litres

ln (Cr)=α+β1 (Ar)+β2ln (P)+β3ln (Ir)+β4 y+ui+εi 4

8
where C is Alcohol consumption in the region (r), A is the number of
Alko outlets in the region, and P the real price of alcohol, I the average
disposable income, y the years-a common time trend for all regions-ui 7.
the error term, and ε the (fixed) regional level effect. In the specification 5
of alcohol availability, on the advice obtained from discussions with
19 20 20 20
Alko, the number of Alko outlets is assumed to be an exogenous Year
95 00 05 10
variable. For example, the size of the population in the region was not a
Alcohol Number of
parameter upon which Alko based its administrate decisions to allocate
consumpti Alko outlets
retail outlets across the Finnish regions. We used Stata version 9.1 and
on
14.0 for the analyses.
Figure 1: The average total consumption of alcohol in litres in terms of 100%
In the modelling, we had some multicollinearity problems because alcohol and the average number of Alko outlets.
the prices of different alcohol qualities correlate heavily, making the

J Pol Sci Pub Aff, an open access journal Volume 5 • Issue 2• 1000252
ISSN: 2332-0761
Citation: Pulliainen M, Valtonen H (2017) The Relationship between Alcohol Availability and Alcohol Consumption. J Pol Sci Pub Aff 5: 252. doi:
10.4172/2332-0761.1000252

Page 4 of 6

The analysis of alcohol consumption was divided into modelling phases. OLS (95% CI) FE (95% CI) FE (95% CI)
First, we explained the log of alcohol consumption using ordinary least Number of outlets 3.17*** (2.89-3.44) .82*** (.52-1.11) .82*** (.51-1.14)
squares (OLS) for testing purposes, and fixed effects (FE; preferred Ln(disposable
1.32*** (1.13-1.50) .08 (-.06-.23) -.00 (-.18-.17)
based on the Hausman test and the fact that our data covered almost income)
all regions) with and without the real price variable. The impact of a Ln(alcohol price) -.03 (-.22-.16) -.26*** (-.32 to -.20)
new Alko outlet is related to the number of existing outlets in the area, Time *** ***

and based on the reset test, no logarithmic specification is therefore Time2 *** ***

appropriate. The models were tested for specification, multicollinearity, Time as a class ***

and heteroscedasticity. In OLS, the reset test for the models indicated variable
that there are no problems in the specification, but the models suffer Constant -10.30 2.23 2.13
from heteroscedasticity. We report robust standard errors for the FE R-squared 0.52
models. No autocorrelation was allowed in the models because the time Number of obs 650 650 650
series dimension was relatively short, while the number of regions is large. OLS: Ordinary Least Squares; FE: Fixed Effects; Ln: Natural Logarithm.
p<0.001, **p<0.005, *p<0.05.
***

Results Time and time*time variables are included in the first two models, and yearly
dummies for 1996-2009 in the third model. The data for brewery products from
We arrived at three main results. First, the number of retail state grocery stores were available from 1998 to 2009. The common significance of the
alcohol outlets has a positive effect on total alcohol consumption. time variables (time, time2 and i.time) are reported.

There is in particular a supply effect for the consumption of strong Table 2: Total alcohol consumption.
alcohol and wine that is sold in Alko outlets: prices affect strong alcohol
consumption. Second, an increase in the number of Alko outlets does OLS (95% CI) FE (95% CI) FE (95% CI)

not increase sales in licenced restaurants and grocery stores. Third, Number of outlets 4.15*** (3.78-4.52) 2.34*** (1.51-3.16) 2.29*** (1.50-3.07)

disposable income does not have an effect on alcohol consumption. Ln(disposable

.29* (.05-.53) .27 (-.07-.60) .03 (-.41-.47)
income)
We also tested whether the establishment of new Alko outlets depended Ln(alcohol price) -.74*** (-.93 to -.54) -.75*** (-.86 to -.61)
on the characters of the municipalities by using an instrumental Time *** ***

variable method-two-stage least squares (2SLS)-and we tested how Time2 *** ***

those results differed from the results of this study. In 2SLS, we used the Time as a class ***

population densities of the regions as instruments for the Alko outlets. variable

The instrumental variable method has been used to solve endogenous Constant 1.11 1.45 .23

problems [33-35]. The instrumental variable estimation results do not R-Squared 0.59

differ from the models where the supply is exogenous (OLS and FE). Number of obs 845 845 845
OLS: Ordinary Least Squares; FE: Fixed Effects; Ln: Natural Logarithm
Total alcohol consumption ***
p<0.001, **p<0.005, *p<0.05
Time and time*time variables are included in the first two models, and yearly
An increase in the number of Alko outlets increases the total dummies for 1996-2009 in the third model. The common significance of the time
consumption of alcohol (b=0.82, p<0.001). When alcohol prices variables (time, time2 and i.time) are reported.
increase, alcohol consumption decreases (b=-0.26, p<0.001). Table 3: Strong alcohol consumption.
Disposable income does not affect alcohol consumption: this can be
seen in the FE variable regressions (Table 2). OLS (95% CI) FE (95% CI) FE (95% CI)
Number of outlets 4.01*** (3.54-4.47) 2.61*** (1.73-3.49) 2.48*** (1.72-3.23)
Strong alcohol, wine, brewery products, and consumption in
Ln(disposable
restaurants income)
5.40*** (5.03-5.78) .47 (-.03-.97) -.15 (-.81-.51)

The consumption of strong alcohol responds positively to the increase Ln(alcohol price) 1.06 (.76-1.37)
***
.00 (-.17-.18)

in the number of Alko outlets (b=2.34 and b=2.29, p<0.001). When Time *** ***

strong alcohol prices increase, alcohol consumption decreases (b=- Time 2 *** ***

0.75, p<0.001). Disposable income does not affect strong alcohol Time as a class ***
variable
consumption. This can be seen in the FE variable regressions (Table 3).
Constant -56.04 -5.63 .40
The consumption of wines responds positively to the increase in R-Squared 0.70
the number of Alko outlets (b=2.61, p<0.001) (b=2.48, p<0.001). Number of obs 845 845 845
Disposable income and alcohol prices do not affect wine consumption.
OLS: Ordinary Least Squares; FE: Fixed Effects; Ln: Natural Logarithm
This can be seen in the FE variable regressions (Table 4). ***
p<0.001, **p<0.005, *p<0.05
Time and time*time variables are included in the first two models, and yearly
A change in the retail state alcohol supply has no effect on brewery dummies for 1996-2009 in the third model. The common significance of the time
product consumption. People buy these products mainly from grocery variables (time, time2 and i.time) is reported.
stores and the sales are not dependent on the supply in Alko outlets. Table 4: Wine consumption.
When alcohol prices increase, brewery product consumption decreases
(b=-0.07, p<0.05). This can be seen in the results (Table 5). Discussion
An increase in the number of Alko outlets does not increase sales in The main result of the study is that the number of retail alcohol outlets
licenced restaurants. Disposable income and alcohol prices do not is positively related to wine and strong alcohol consumption sales. We
affect alcohol consumption in restaurants. This can be seen in the FE estimated the effect by region, so the effect cannot be explained by
variable regressions (Table 6). changes in outlet choice, i.e. sales moving from one outlet to another.

J Pol Sci Pub Aff, an open access journal Volume 5 • Issue 2• 1000252
ISSN: 2332-0761
Citation: Pulliainen M, Valtonen H (2017) The Relationship between Alcohol Availability and Alcohol Consumption. J Pol Sci Pub Aff 5: 252. doi:
10.4172/2332-0761.1000252

Page 5 of 6

OLS (95% CI) FE (95% CI) FE (95% CI) illegal demand has been partly transformed into legal sales at Alko
Number of outlets 1.65 (1.40-1.90)
***
.29 (-.07-.66) .29 (-.08-.66) outlets. As mentioned, travellers’ alcohol imports from abroad are
Ln(disposable income) .49*** (.26-.72) -.00 (-.14-.13) -.00 (-.18-.17) difficult to assess and predict reliably.
Ln(alcohol price) .02 (-.17-.21) -.07* (-.13 to -.02)
The increased number of Alko outlets has increased sales from Alko
Time ***
outlets and also slightly raised Alko’s market share, and it has also
Time2 ***
contributed to the higher total consumption of alcohol. One factor
Time as class variable ***
increasing Alko’s outlet market share may be the fact that drinking in
Constant -3.73 1.35 1.36 restaurants is always more expensive than buying alcohol from Alko
R-Squared 0.31 or other retail shops. Based on our regression models, there is no
Number of obs 660 660 660 relationship between Alko outlet sales on restaurant or grocery store
OLS: Ordinary Least Squares; FE: Fixed Effects; Ln: Natural Logarithm alcohol sales.
***
p<0.001, **p<0.005, *p<0.05
Time and time*time variables are included in the first two models, and yearly Based on our regression models, alcohol consumption is not associated
dummies for 1996-2009 in the third model. The data for brewery products from with disposable income. The incomes were quite low, and that differs
grocery stores were available from 1998 to 2009. The common significance of the
time variables (time, time2 and i.time) are reported. from some previous results. Our results depict average amounts,
and the drinking age of the studied population was 15-89 years.
Table 5: Brewery product consumption.
Conclusions should be interpreted with caution, because there may
have been differences if we had studied the population as groups of
OLS (95% CI) FE (95% CI) FE (95% CI)
young, middle-aged, and older people.
Number of outlets 3.17*** (2.32-4.03) 1.26 (-.27-2.78) 1.30 (-.21-2.81)
Ln(disposable
3.29*** (2.93-3.66) .29 (-.15-.73) .29 (-.29-.87)
This study contributes to the discussion of the purpose of state control
income) of alcohol consumption: is there still a point to the monopoly, how well
Ln(alcohol price) .63** (.26-1.00) -.02 (-.13-.09) does taxation through alcohol prices work, and is there a relationship
Time *** ***
between drinking Alko and grocery stores products and drinking in
Time 2 *** ***
restaurants? The results show that there may be link between alcohol
Time as class variable ***
consumption and the number of retail alcohol outlets. This could be
Constant -32.91 -2.11 -2.33 a result of the long Finnish alcohol monopoly and restricted alcohol
R-Squared 0.37 policy. We assume that Finland has its own alcohol culture that is based
Number of obs 858 858 858 on the strict alcohol monopoly.
OLS: Ordinary Least Squares; FE: Fixed Effects; Ln: Natural Logarithm
***
p<0.001, **p<0.005, *p<0.05. The main strength of the study was the measurement of alcohol
Time and time*time variables are included in the first two models, and yearly availability: the supply effects were clearly estimated, while the
dummies for 1996-2009 in the third model. The common significance of the time consumption is measured from reliable sources. Many surveys where
variables (time, time2 and i.time) are reported.
people report their drinking habits underestimate alcohol amounts;
Table 6: Alcohol consumption in restaurants. our study uses sales, which are objective.

Strong alcohol consumption appears to be responsive to price level, but
the disposable income of households does not affect consumption. In
alcohol policy, the most common policy tool has been the price policy.
In this paper, we have shown that the control of supply can still be a
meaningful policy tool. The political problem in using this tool is that
Finns seem to be more willing to accept a rise in prices than a limit
to supply. Conclusions should be interpreted with caution, however,
because Alko’s strategy in opening new outlets was not known to us,
and we had to treat outlet openings as an exogenous variable.
There are two main limitations to our study. First, we could not
solve the potential endogeneity of Alko outlets, because no clues to
the potential decision rule are available. Causality between regional
characteristics and the decision to open a new outlet remain a mystery.
Travellers’ alcohol imports from abroad are difficult to assess, and our
results on the effects of imported alcohol are vague. Some studies on
travellers’ imports and undocumented alcohol consumption have been
conducted, but more reliable information is still needed [3,28].
As the number of Alko outlets in a region increases, it is evidently easier
to obtain alcohol from the official outlets than to distil illegal alcohol at
home. Consumption of moonshine has decreased in recent years. The
estimated amount of undocumented alcohol consumption per year is
about 2 litres of alcohol (in terms of 100% alcohol) per citizen [36].
An increase in registered alcohol consumption may imply that the
Gruenewald et al. [22] argue that obtaining sufficient data to examine
comprehensive models of access to alcohol is difficult. Previous research
has demonstrated that in many cases, increased alcohol availability
also increases consumption, but uncertainty remains concerning the
magnitude of the effect on alcohol consumption. Our study shows that
the magnitude of the effect on alcohol consumption is statistically high,
and only one Alko outlet more per 1,000 drinking-age peoples would
lead to an increase in consumption of 2.3 litres of strong alcohol and
2.5-2.6 litres of wine per year. Strong alcohol consumption seems to
decrease lightly when prices increase.
Conclusions
This study provides evidence that alcohol availability has an impact
on alcohol consumption, and basically, supply can be used as a policy
tool. However, we need more detailed information on sales volumes
of alcohol, as well as product-specific prices at the store and the local
level, to reliably reflect the impact of availability. Unfortunately, this
information is not currently available. Pressure for alcohol policy
change and the deregulation of alcohol sales requires that the positive
effects of the monopoly can be demonstrated. Further information is
also needed on private imports from abroad to reliably estimate the
total consumption of alcohol.
Declaration of interest
None.

J Pol Sci Pub Aff, an open access journal Volume 5 • Issue 2• 1000252
ISSN: 2332-0761
Citation: Pulliainen M, Valtonen H (2017) The Relationship between Alcohol Availability and Alcohol Consumption. J Pol Sci Pub Aff 5: 252. doi:
10.4172/2332-0761.1000252

Page 6 of 6

Acknowledgements
This study was funded by an Yrjö Jahnsson foundation scholarship. Special thanks
go to Saini Tähtelä and Arja Muhonen from the state alcohol company (Alko) for
their co-operation and assistance with the data. We include special thanks to Petri
Böckerman for the help and advice he has given at all stages of the project.
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J Pol Sci Pub Aff, an open access journal Volume 5 • Issue 2• 1000252
ISSN: 2332-0761